Plaid’s $13. 4 billion valuation makes its founders fintech’s newest billionaires

San Francisco fintech startup Plaid made waves in January 2020 when it announced it was selling to Visa. Now, with a $13 billion-plus valuation after a new funding round, founders Zach

Perret and William Hockey will be glad the deal fell through. Plaid helps fintech apps like Robinhood connect easily to consumers’ bank accounts, and it announced on Wednesday that it has

raised $425 million in funding from investors Altimeter Capital, Silver Lake and Ribbit Capital. The round, which included past investors Andreessen Horowitz, Index Ventures, Kleiner

Perkins, NEA, Spark Capital and Thrive Capital, values the company at $13.4 billion post-money, sources confirm to _Forbes_.  The new valuation makes Perret, Plaid’s CEO, and Hockey, who

left the business in 2019 but remains on its board of directors, new billionaires. _Forbes_ estimates that Perret holds about 13% of Plaid, while Hockey owns about 12%. At Plaid’s new

valuation, Perret’s stake in the eight-year-old company is worth $1.5 billion; Hockey’s is worth $1.4 billion. (_Forbes _applies a 10% discount to private company valuations.)  In early

2020, just before Covid cases started spreading quickly in the U.S., Visa announced its plan to acquire Plaid for $5.3 billion. Big fintech acquisitions and IPOs had been few and far

between, and the deal was seen as a big win for the industry. “At the time, the deal made a ton of sense,” Perret says. “I was initially excited about it,” says Mark Goldberg, a Plaid

investor, board member and partner at Index Ventures. “I thought there were synergies and that it was a great validation.”  But as Covid swept the country and Americans were stuck at home,

Plaid’s customers saw a spike in demand. Robinhood, Coinbase, digital bank Chime and buy-now, pay-later service Affirm experienced record growth. “That's one of the beautiful things

about Plaid–you don't have to pick if it’s Chime or Robinhood or Current that wins. If you believe that fintech is going to explode as a category, then Plaid is a derivative bet on that

whole thesis,” Goldberg says. As fintech boomed over the course of 2020, so did Plaid. Its business grew 60% last year, the company says. Annualized revenue reached about $170 million by

December 2020, a source tells _Forbes_; Plaid declined to comment. “Three-fourths of consumers are saying they've achieved a new normal in their financial life, and they plan to fully

interact with their financial services digitally,” Perret says. “The 50-plus demographic, for example, is one of the fastest-growing demographics amongst many of our customers.”  Near the

end of 2020, the agreed-upon $5.3 billion price tag wasn’t looking so great after all, and in November, the Department of Justice announced it was suing Visa to block the deal. The DOJ

asserted that Plaid had been “developing a payments platform that would challenge Visa’s monopoly” and that the acquisition would eliminate a “nascent competitor.” The two companies called

the deal off a few months later. “We are confident we would have prevailed in court as Plaid’s capabilities are complementary to Visa’s, not competitive,” Visa said at the time. “Waiting for

another year or more of regulatory uncertainty didn’t feel like the right decision,” Perret told _Forbes_. Plaid’s investors cheered its future as a stand-alone company. “I think I

high-fived my wife,” Goldberg says.  Now venture capitalists are paying top dollar to get a piece of Plaid. If we assume that, based on last year’s growth and annualized revenue, Plaid

expects to make $225 million in revenue this year, investors would be paying 59 times sales at the $13 billion pre-money valuation. For payments giant Stripe, the comparable revenue multiple

is 50, estimates Lisa Ellis, a partner and senior analyst at investment research firm MoffettNathanson. Stripe was recently valued at $95 billion, and Ellis projects it will hit $1.9

billion in revenue in 2021. Will Plaid join the ranks of its high-flying customers like Coinbase, Robinhood and Chime in planning to become a public company? Perret didn’t dispute the notion

that plenty of special purpose acquisition companies would have gladly taken his business public right away. Bringing on Altimeter, Silver Lake and Ribbit Capital, he says, would help bring

“public-market knowledge” to Plaid, implying he’s preparing for a future IPO.  But asked point-blank if Plaid plans to go public this year, Perret demurred, saying simply that Plaid has “no

immediate public offering plans on the horizon.” Got a tip? Share confidential information with Forbes. Editorial StandardsReprints & Permissions